The world is shifting away from fossil fuels and toward anything and everything green. That means hydrogen stocks will continue to see interest for some time to come. The ongoing conflict in Ukraine amplifies this interest as numerous countries are looking to penalize Russia for its invasion by targeting its vast oil reserves, leading the way for hydrogen stocks with growth potential to shine brightly.
The geopolitical ramifications of Russian oil are of course much deeper than that but the overall impact is clear: It’s yet another reason to diversify away from fossil fuel and toward green energy including hydrogen.
Hydrogen has use in electricity generation and in vehicles among other applications. That serves to make it very attractive for the reasons listed above.
So here are three of the best hydrogen stocks to buy to take advantage of these trends.
Linde (NYSE:LIN) is the best hydrogen stock investment of this bunch for the simple fact that it is incredibly stable. The other companies listed below have greater upside but much more risk as well. Linde is the world’s largest industrial gas company and also one which has been operating for over a century.
The company produces a lot of hydrogen which is used for a great majority of chemical processes. That hydrogen requires natural gas to be processed which should be marked by higher prices for some time. Germany is a giant industrial nation that prior to Russia’s invasion of Ukraine, relied heavily on Russia for natural gas. It is weaning itself off of that reliance. That means increased hydrogen production in Germany is required.
Linde builds such plants and also built a similar plant that utilizes Niagara Falls to power a nearby plant. That plant will come online in 2025. In general, Linde is especially stable because of its business model. Plants come with multiple-decade contracts that result in steady, predictable business.
Bloom Energy (BE)
Bloom Energy (NYSE:BE) is a growth stock enthusiast’s share, as well as one of the best hydrogen stocks. The company makes and sells solid oxide fuel cells that are used to provide electricity on-site. It’s the kind of business that is attractive now because of subsidies. Those subsidies are fueling growth as the U.S. moves toward its green energy aspirations. And such programs can and do change leaving companies like Bloom Energy subject to substantial risk.
In any case, there’s a lot to like about Bloom Energy as a hydrogen stock. It’s just a riskier investment than Linde which is a century-old firm. Among its attractive factors are its record Q1 revenues of $275.2 million. That’s a 37% increase over the same period a year earlier. During that same period, margins increased from 13.9% to 19.7%, also very encouraging.
Yet Bloom Energy’s losses didn’t change much and the company posted a net loss of $74.9 million. The growth is encouraging. The losses are a running concern. And the overall potential remains high.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) develops hydrogen fuel cell systems that it sells in the stationary power and materials handling markets. This makes it a hydrogen stock to buy. Its fuel cell systems are particularly strong sellers in the forklift industry.
The story of Plug Power is very similar to that of Bloom Energy as it relates to fundamentals. As a massive growth hydrogen stock, sales are booming and losses are large. Revenues increased by 49% in the first quarter, reaching $210 million. But losses grew just as fast and reached $207 million.
Currently, it isn’t that important that Plug Power loses $1 million for every $1 million of sales it makes. The fact that it’s growing so quickly is what matters and that makes it a buy. But over time it will have to move toward efficiency and ultimately profitability.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.